Technology can fix India's problems: Nilekani

New Delhi: Co-chairman and co-founder of Infosys Technlogies Nandan Nilekani has authored a book Imagining India. The book has a unique problem solving perspective to the crises and the challenges of 21st century India. Nilekani explains the rationale behind writing the book saying he wanted to get into the root of what makes India tick. He says the book presents a holistic picture of India. He points out that in the last decade and half, Indians have got used to technology and now it can be used to solve some of India's biggest problems.

Rajdeep Sardesai: Hello and welcome to a very special show with a very special guest. We're joined today by the co-chairman and the co-founder of Infosys Technlogies, but today let me introduce Nandan Nilekani as the author of Imagining India, his just released book that really has a unique problem solving perspective to the crises and the challenges of 21st century India.

Nandan, congratulations on the book.

Nandan Nilekani: Thank you for having me here.

Rajdeep Sardesai: I know you've been asked this in various interviews but why does someone who’s an information technology entrepreneur suddenly decide to turn part sociologist, part historian and part economist. What did it for this book?

Nandan Nilekani: I wanted to get into the root of what makes India tick and I realise that if you take a very narrow view of it you can't explain it. So I had to delve into all these various things tie up all these threads to get that holistic picture of India.

Rajdeep Sardesai: It's interesting because your book is about post-reform India, post-1991 India. A fellow Bangalorean and your friend Ram Guha wrote about India after Gandhi, so there’s something about Bangaloreans in the air that...

Nandan Nilekani:... That makes you look far away from the action so you get a perspective.

Rajdeep Sardesai: It is about that perspective that’s slightly distant. Your book is about two kinds of ideas. It talks about the vertical ideas and the horizontal ideas. The vertical ideas being the ones that divide us, for example caste, region, religion, and horizontal ideas being environment, education, technology and health that unite us. You believe that vertical ideas will become less and less important.

Nandan Nilekani: No, I don’t think so. I think vertical ideas are the basis of our debate today and understandably because it makes sense for those who want to succeed in political sense and identify a group of people who feel that they have been treated unfairly and be the voice for that. That’s a perfectly valid thing. But at the end of the day it is these horizontal ideas that move the country forward.

Rajdeep Sardesai: But what you're hoping for is that vertical ideas become less and less of the central focus of the country, that India thinks much more about education, technology, health, environment as the challenges of the future .

Nandan Nilekani: Absolutely. It is an optimistic book because I am trying to say that while these vertical ideas will divide us, ultimately these horizontal aspirations of a billion people will drive change. And I have given many examples of how these horizontal ideas have overcome the vertical divide.

Rajdeep Sardesai: But my worry is that in democratic politics we've seen things like the Maharashtrians Vs north Indian divide in Mumbai, we've seen in the way in which terror also has a religious dimension. So I just wonder whether democratic politics will prevent your horizontal ideas from being translated into action.

Nandan Nilekani: No, that’s why I call this a safety net of ideas because if the politics of the situation doesn’t allow these things then obviously people, who adopt these ideas as a frame of reference will sort of act as a safety net against bad decision. And on the other hand, if there's a very good leadership which takes these ideas and runs with the ball then you have a very accelerated way of looking at the future.

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Rajdeep Sardesai: In your book, you’ve written about higher education and labour laws. As we've seen these are also politically contentious, ideas, on which it’s difficult to build a consensus in democratic politics.

Nandan Nilekani: That is because they are being positioned on the wrong frame. I think if we look at them as issues to improve access then it becomes very fair, because ultimately this book is about improving access. More people should have more access to more education, more jobs, more infrastructure, markets and so on. That is very much a politically acceptable point.

Rajdeep Sardesai: That maybe acceptable but we've seen in higher education entire debate about say reservation quotas, we've seen it in labour laws over how much can you reform labour laws. I just wonder whether it might be easier to work with your ideas in a system which was perhaps less democratic, ironically?

Nandan Nilekani: In the book, in fact I am strong votive of democracy. The fact that English survived in India is because of democracy. Similarly, the fact that we don’t have a steep decline in the population like the Chinese but have a more gradual demographic dividend is because of democracy and the failure of the Nasbandi movement in the emergency. So actually democracy has stepped in many times to drive this. This is not a book for a non-democratic framework.

Rajdeep Sardesai: Yes, because you are a Nehruvian. You express your admiration for Nehru and yet you seem impatient at one level with the Nehruvian state.

Nandan Nilekani: No, I think Nehru did extraordinary work in terms of creating the structure of India, and democracy, secularism but as you look beyond that we have to carve out a new vision and that's what I say, if you look at India from the future and not from the past, it comes with a whole new paradigm.

Rajdeep Sardesai: Yes, but one of the challenges that face India is the kind of messy politics we have. Take for example, you speak about urban planning with a lot of passion and the need for us to have a clear vision for our cities which have become more and more important. Yet let’s take a slum re-regularisation scheme. No politician in our country is going to abandon a slum re-regularisation scheme because it’s a vote bank. So there’s a constant tension.

Nandan Nilekani: I don’t think that necessarily negates my point of view. All that I am saying is that if you are unable to execute the ideas that we have agreed upon and they are all very big ideas and if we can execute and resolve our ideas and anticipate our future based on what we've seen, we have a whole new paradigm that we can create. That’s really what the book is all about.

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Rajdeep Sardesai: That’s interesting because you’re already anticipating ideas and challenges of the future. You’re anticipating environment being a major challenge, healthcare being a major challenge, and energy conservation being a major challenge. These are all huge challenges but I wonder whether we have the quality of political leadership in a coalition era — blackmail, compromise — that can actually deal with these challenges. In that sense have we missed the bus?

Nandan Nilekani: I don’t think so. I think if you look at the first six ideas that brought India to where we are, you the fact that we have the youngest population in an ageing world, we are great entrepreneurs, fact that we know how to use technology, the fact that global factors are in our favour, the fact that democracy is getting deepened and the fact that we have English. All these are unique, unprecedented advantages that no other country in the world has. So if it all we can do it, we can do it now.

Rajdeep Sardesai: We are standing here on Raisina Hill and around is the magnitude of the Indian state. Part of your book is to somehow or the other see downsizing of the state, of decentralisation, where local governments get more empowered. You think this leviathan state is going to give up power?

Nandan Nilekani: People will make it happen. It will be demanded by the people. I will give you the example of the English language. In 960s there were states that stopped teaching English to people saying it's a foreign language. Today they all teach the language not suddenly because a politician said that they should learn English, but because the people said they wanted to learn English. So that’s how the change will happen. It will come from the bottom.

Rajdeep Sardesai: Even these divides that are created — Maharashtrians and north Indian clash, divides over terror — do you believe that people’s power and power of their aspirations will overcome those divides?

Nandan Nilekani: We are completely underestimating the aspirations of young people. Vast majority of young people in this country don’t have a vote, they don’t know what’s happening. Their aspirations are completely different from all this and they will drive the change. My wife Rohini meets young children in villages. Not one says they want to be farmers.

Rajdeep Sardesai: So your' talking about what you call the demographic dividend...

Nandan Nilekani: But a demographic dividend can be a demographic disaster.

Rajdeep Sardesai: Yeah, demographic dividend meaning that the working age population till 2035 will be such that it will create a momentum of its own. So population, which was seen by some as a crisis, you see as an opportunity.

Nandan Nilekani: As a central theme of my book. I start with the fact that in the 60s, we viewed population as a burden but today it is viewed as an asset. At that time we had to control it, today we call it human capital, and that’s the real fundamental change that is driving this whole thing.

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Rajdeep Sardesai: You wrote this book — I am presuming — at a time when the Sensex was hovering around 20000, or at least started writing it when there was no danger of Citicorp collapsing and there was no real threat of lay offs. Have the events of the last few months made you a little bit more circumspect, a little less bullish about India and reforms?

Nandan Nilekani: Actually the book is more relevant in this environment because in some way that growth we have had has been bolstered by the steroids of this financial liquidity. Now those steroids are being pulled out and it goes back to saying that we have to go back to the basics. This book is absolutely about basics, healthcare, education, infrastructure, urbanisation, single market -- stuff that makes things work for people. It is not about investment banking or next new financial product. It's just about basics.

Rajdeep Sardesai: But you do argue that post 1991, certain energies and entrepreneurial energies were unleashed. Now there are people who having seen the events of the last few months are actually talking about the need for less liberalisation. You believe it’s a time to widen the scope of reforms?

Nandan Nilekani: I think half reform is worse than no reform because half reforms create benefits for people like you and me, people who are in a basic position to benefit. It does not benefit the wide population. To me reforms is not about fat cat billionaires buying planes, it’s not about socialite women buying Italian handbags, it's about removing the controls so that more people have access to basic education, healthy and stuff like that.

Rajdeep Sardesai: In the book you mention the need for agricultural reforms, which somehow got lost out in post-1991 India. But the benefits in that sense have been cornered by a few.

Nandan Nilekani: Absolutely. I think it's ridiculous that in areas like insurance or banking we have national markets but a farmer can only go to his local APMC and sell. He can’t sell his produce to anybody else. Why are you denying the farmer the right to sell to somebody else? So there are a lot of vested interests who don’t want this to be removed. We should not buy into their argument. We have to focus on providing access to people and we can do that only by riding over the vested interest in this country.

Rajdeep Sardesai: Are you worried though that the events of the last few weeks will make this battle even more contentious? Mrs Sonia Gandhi the other day spoke of bank nationalisation. Your book makes a strong case for private banking, for increasing access to banks.

Nandan Nilekani: I think nationalisation of banks had two or three good advantages. Number one, it created an Indian middle class. One million joined the banks from 1969 to 1984. Second, it removed the community orientation of the banks. Thanks to the Banking Services Recruitment Board (BSRB), you hired employees for all the banks, so you mashed up the community solvings. And third, it did lead to one level of financial inclusion because you opened a lot of branches. We went up to 50,000-60,000 branches. But it also had other problems of NPAs and so on and so forth, so I think that we have to focus on those reforms that make access possible. Just access, access. access. That's the name of the game.

Rajdeep Sardesai: And a lot of this access — this is another running theme through your book — is through technology. You even speak of a single multipurpose identity card. I believe that in some way, access to technology will transform the system dramatically.

Nandan Nilekani: Absolutely, I think number one, Indians have got used to technology. The fact that we have 6-8 million mobile users, the fact that 90 per cent of mobiles phone connections are prepaid, the fact that 40 per cent of subscribers are recharging for Rs 10 each time shows that technology has reached the masses. Point number two is we have the talent. Point number three, an open society can take technology better than a close society. So given all that, I think we should use technology in a big way.

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Rajdeep Sardesai: But will technology solve what most people is the biggest problem — delivery system and implementation. Are we going to be able to implement it across the country?

Nandan Nilekani: Absolutely, within 10 years.

Rajdeep Sardesai: Because the fear is that some would say that access to technology may only widen the gap between the haves and have nots. Let's take neighbouring states Chhattisgarh and Gujarat. While Gujarat might benefit from technology because it has better infrastructure already but Chhattisgarh might actually go further behind.

Nandan Nilekani: I believe in 10 years, every nook and cranny of this country will be reached by some form of connectivity. It's going to happen not because of anything we did. Global technology will drive that. If you can use technology and give benefits directly to the people instead of this whole corrupt system that we have, we can dramatically change their lives.

Rajdeep Sardesai: You actually believe that things like the single multipurpose identity card can actually reduce computation. We've seen it with taxation and the PAN card system.

Nandan Nilekani: My point is that if you look at our tax system, the way we collect revenues, 90 per cent of our taxes were indirect taxes like sales tax and excise tax which are based on a product. In another 10 years, 90 per cent of our taxes would be direct, like people like you and me and everybody else paying taxes. So there's a huge shift. The same thing has to happen in our benefits. We have to go from indirect benefits, which were corrupt and go to the wrong people, to direct benefits where we out whatever the benefit is into the hands of the people and that can be done easily with technology.

Rajdeep Sardesai: My bigger worry has always been regional divide. I see the market oriented states of the West progressing far more than the hinterlands of the country. Can the divisions really be overcome?

Nandan Nilekani: Easily but you have to think through that. At the time of writing my book, when I began looking at public issues I said I'll not bring in technology. They'll say this guy is one of those computer boys trying to fix everything with software. Now I realise that the only way to fix this is through technology. After 10 years of trying to figure it out.

Rajdeep Sardesai: There would be those who would say that Nandan Nilekani and Infosys benefited because you had to deal less and less with politicians. You were kept away from all the contentious political issues of that time. But those who had to deal with the coal sector had to deal with politics.

Nandan Nilekani: That is there and I talk about that the fact that how do we define a better rule-based system. So that national resources, for example, decided in the most transparent manner and so on and so further. But fundamentally my point is that we have a transformational opportunity for India and we can use technology to leapfrog. I am totally convinced on what has been done and what can be done.

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Rajdeep Sardesai: I am not just being provocative here. Your prescription would be more suited to a Narendra Modi in Gujarat who is already adopting it with his Modi model of development, than a Mayawati who's pushing the vertical issues of caste and religion.

Nandan Nilekani: Yes but what I believe will happen is that as more and more people get political capital out of things I suggested, it will get a momentum. It is inevitable. By 2020, 90 per cent of this population will be educated and it will be young. They are not going to hold on to old ideas.

Rajdeep Sardesai: So you actually believe and this is a message in the sense that for the politicians that development actually gets your votes.

Nandan Nilekani: No I think anyone who focuses on improving the delivery system. Development is not just doing things for the rich guys but improving the delivery system that delivers between public services using reform is going to do extremely well. People want better road, better water, better schools, better education, better English, better jobs that’s what people want.

Rajdeep Sardesai: And you actually believe that the force of this human capital will transform the system?

Nandan Nilekani: Absolutely.

Rajdeep Sardesai: You don’t therefore see that all of us are powerless confronted with this large bureaucracy , the state?>

Nandan Nilekani: No, there are a half a billion young people, with aspirations ignited by people like you on television.

Rajdeep Sardesai: Ignited by people like you at Infosys, not by people like us,.

Nandan Nilekani: They are going to drive the change. Where there are not, it’s going to happen. My book in some sense predicts those changes.

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Rajdeep Sardesai: Okay let me try and be even more provocative for a change then. We are in a year where Barack Obama became the first African American US President. Audacity of Hope was the book he wrote, which is a lot like yours. It's a book about hoping and creating a dream for the future. You’re also creating a dream for the future. Would someone like Nandan Nilekani want to get involved in public life, beyond just offering prescriptions and ideas?

Nandan Nilekani: I'd like to contribute to the process definitely. Look I like to be the problem solver. My trip in life is to solve large, complex problems so I'll be happy to do that and I can actually help solve and implement a lot of the stuff in my book. I don’t need to be in a formal political role for that. I just have to roll up my sleeves to fix a few problems.

Rajdeep Sardesai: I am saying that because over the last 10-20 years, the urban middle class has moved away from politics. They have become more and more cynical. They’ve almost voted with their feet and gone off to Manhattan. Do you actually believe that that process is also reversing? You’ve got a lot of confidence for example in the NGO sector in what they are doing with pushing for change at the local level.

Nandan Nilekani: I am very optimistic. Not because it’s a naiveté or that sort of a stuff. I mean look at all these factors and how they play together. It’s inevitable that the combination of aspiration will demand a better country and that will drive these changes.

Rajdeep Sardesai: So you’re imagining an India which will be a real power of the 21st century?

Nandan Nilekani: Yeah but you can’t be power by muddling through, you can’t be a power by being divisive, you can’t be a power by thumping your chest every morning. You can only do what you can by having a strategic vision and executing on those visions relentlessly. This in some sense defines that strategic vision.

Rajdeep Sardesai: And that vision extends to all sectors?

Nandan Nilekani: You cant do this linearly. You can’t say we'll fix poverty today, unemployment tomorrow, and energy day after. It has been done in one holistic manner.

Rajdeep Sardesai: Your book certainly did make an impact on me and I am sure it will make an impact on several others. Thank you very much Nandan Nilekani for joining us.

Nandan Nilekani: Thank you for having me.